The investors from countries including the UK, Canada, Iran, Qatar, Oman, Australia, Kuwait, France, USA, and Spain are demanding their staged payments back after hundreds of off-plan apartment blocks have been stalled, cancelled or put ‘on hold’. (See latest UAE media coverage on the situation at this link http://www.thenational.ae/
http://business.maktoob.com/
The investors have come together via a specially-created website called www.ajmaninvestors.com and most are demanding their money back.
Some of the investors have poured their life savings into the developments – only to be left with no apparent protection and a fear that they have little chance of getting their money back.
Other investors have paid as much as £300,000 for some of the off-plan apartments in an area that was being promoted as ‘the new Dubai’.
A spokesperson for the group said: “This is a sham. All parties: sub-developers, main developers, ARRA (Ajman Real Estate Authority), the Ajman Government and the UAE Government are complicit in this scandal.”
He added: “Investors have paid, in good faith, deposits and staged payments to developers but very few apartment towers (blocks) have been started.
“Most investors have little idea of why the developments have not been started because neither the developers nor the authorities, including ARRA, which was set up to regulate these developments and protect investors, have been willing to communicate openly about the reasons for the delays and cancellations of projects.
“We are simply left with speculations, rumour and hearsay including that some developers have fled the country with investors’ money and other developers have failed to put in roads, electricity and water supplies because they have run out of money and this has stopped sub developers from moving ahead with their developments. Other reasons or excuses circulating include ‘because of the financial crisis’.” (See Note to Editor below for further information about ARRA’s failure to declare these developments ‘cancelled’)
Some developers are thought to have been jailed due to allegations of fraud or for failing to meet their contractual obligations. Other developers have reportedly fled the country taking with them millions of pounds of investors’ payments.
The group of investors believe that there could be as many as 170,000 investors from across the globe that may be affected by the stalled or cancelled developments in Emirates City, Emirates Lake Towers, Al Humaid City, Marmooka City and others.
The group believes that these 170,000 investors may have already paid – collectively – more than £3 billion in deposits and staged payments! (Please see Note to Editor for breakdown of this figure).
The spokesperson added: “Most investors that have shared their stories either on our website or in property forums simply want their money back. They have completely lost confidence in the authorities in Ajman and the UAE.
“We simply don’t trust the authorities any more – mainly because they have refused to communicate honestly with us and to be fair to investors.”
“It’s time that the Ajman Government or ARRA showed proper leadership and if needs be should ask the UAE Government to fund the cost of installing infrastructure which might then allow at least some of the developments to be built. Alternatively, the Ajman Government should refund investors from monies paid by developers (to the Ajman Government) for the land. The Ajman Government should then, in turn, take back ownership of the land that they have sold to developers.”
“At the end of the day, most investors, may end up with nothing and some will have lost their life-savings, but the developers, ARRA, the Ajman Government and even the UAE Government will have lost something much more significant – their reputation.
“The loss in investor confidence through this latest scandal and escapade of the UAE authorities will lead to the loss of foreign investment worth billions of dirhams over the coming years.
“The UAE authorities simply can’t treat thousands of investors worldwide with such disregard, as they have been doing, and expect the international community to give the UAE authorities the respect they so badly crave.”
-ENDS-
Date: 3rd March February 2010
Notes to Editor:
• For further information and lots of concerns raised by investors about this issue please visit http://www.propertycommunity.com/
• For latest UAE media coverage on the issue please visit http://www.thenational.ae/
• http://www.thenational.ae/
• For more information about ARRA, please visit www.arra.ae/
The Ruler of Ajman, His Highness Sheikh Humaid bin Rashid Al Nuaimi, issued three legal rulings in 2008 called ‘Amiri Decrees # 8, 11 and 12’ that threatened developers with heavy fines if they failed to register their developments with ARRA and open escrow accounts – in order to protect investors’ monies - by 1st May 2009. For decrees visit http://www.arra.ae/
The decrees explicitly say that any developments that have not been registered by this deadline will be declared ‘cancelled’
• How we calculated the number of investors:
http://www.thenational.ae/
Originally planned: 900 towers
Registered developments (i.e. likely to go ahead): 172 (as of August 2009)
Therefore, potentially 728 towers cancelled, put on hold or stalled.
@ average 40 floors per tower with six apartments per floor = 240 apartments per tower
x 728 stalled/cancelled/
If average price of 1 bed apartment is 380,000 AED and investors have paid 30% in deposits and staged payments to date = 114,000 AED per apartment = 19,918,080,000 AEDs @ 5.8 AED to £1 = £3,434,151,724 (some people have paid up front in full so this is a very conservative estimate!).
Issued by Red Flame Marketing on behalf of investors that have signed up on www.ajmaninvestors.com
For further information, please contact Richard Boyd at Red Flame Marketing on 0161 212 1113 or 07792 819 059.
